From 6 April 2018 the minimum auto-enrolment rates will increase.
The rates are expressed as a percentage of an eligible jobholder’s qualifying earnings.
The minimum rate for employers will increase from 1% to 2%. The minimum rate for employees will increase from 1% to 3%.
The qualifying earnings rate will also increase as follows:
- The earnings trigger remains the same at £10,000
- The lower limit of the ‘qualifying earnings’ band will increase to £6,032
- The upper limit of the ‘qualifying earnings’ band will increase to £46,350
A “jobholder” is defined as a worker who meets the following criteria:
- Working or ordinarily works in Great Britain under a contract
- Aged at least 16 and under 75
- Paid qualifying earnings
An “eligible jobholder” for auto-enrolment purposes is a jobholder who:
- Is aged at least 22
- Has not reached state pension age
- Has qualifying earnings above the earnings trigger
Eligible jobholders do not include those who have opted out of the auto-enrolment process.
Following the government’s review of auto-enrolment in 2017, the Department for Work and Pensions has proposed to lower the age at which workers are automatically enrolled from 22 to 18 from the mid-2020s.